Working Capital Solutions For New Franchise Owners

Taking that leap into franchise ownership offers all of the independence of entrepreneurship, with the built in branding, training, business model, and support network that is not found in other companies. However, even with everything in place for success in a franchise – perhaps the most “turn key” business model available today – there are periods where franchisees find themselves in need of extra working capital. Fortunately, there are a number of working capital solutions available for franchise owners, and some of them do not place any debt on the balance sheets.

Try Asset-Based Lines Of Credit

Asset-based lines of credit are structured around property owned by the franchisee. This can be in the form of owned equipment, real estate, and even receivables. This revolving line of credit can be drawn upon as needed, and replenished in much the same manner as a business credit card. The big advantage to asset-based lines of credit is that they grow along with the business, which makes them perfect long-term sources for funding to keep on hand. This financing option does not require franchise owners to take on any debt.

You Can Use MCAs For Working Capital

MCAs, or merchant cash advances, give franchise owners short-term working capital to be used for everything from buying additional supplies to hiring more staff, and anything else the business needs. MCAs do not place any debt on the balance sheets, and have no rigid payment schedules. Instead, they are repaid through a small percentage from customer credit card transactions, which gives franchise owners a lot of flexibility during slow sales periods, and the opportunity to pay off the advance early during customer rushes.

SBA Loans For Franchise Owners

SBA loans may not be structured around specific franchises, but there are industry specific variants, as well as SBA loans for construction and real estate for emerging franchise owners. The drawback to SBA loans comes in getting them processed and approved through conventional channels. To speed up the entire process and ensure competitive rates, certain commercial finance organizations are designated as “SBA Preferred Services Companies,” and can fast track SBA loan applications to get franchise owners the working capital they need as soon as possible.

If you would like to explore working capital solutions, or if you need funding that doesn’t quite fall into any specific category, call CounselPro Lending at 1-888-292-3322. Our team has the expertise and knowledge to get franchise owners the capital they need to successfully launch and grow their operations.


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